Bad loans take toll on two city banks

A STAFF REPORTER

Calcutta, Feb. 5: Rising bad loans have dragged down the net profits of the United Bank of India (UBI) and Uco Bank — the two city-based public sector lenders — during the third quarter ended December.

The UBI has posted an 81.32 per cent fall in net profit at Rs 42.2 crore against Rs 226.02 crore in the corresponding quarter of the previous fiscal.

Though total income rose 17.40 per cent to Rs 2,599.39 crore, a 125.8 per cent increase in provisioning at Rs 450 crore against Rs 199.29 crore a year ago dented the bottomline.

For the nine months ended December, the bank posted a decline in net profit at Rs 360.72 crore against Rs 483.24 crore in the same period a year ago.

The bank’s board today approved a capital infusion through a preferential allocation of shares of Rs 100 crore in the form of common equity to increase tier 1 capital. It is subject to the approval of the shareholders.

Uco Bank has reported a 69.2 per cent slump in net profit at Rs 102.47 crore against Rs 332.55 crore a year ago. Total income grew to Rs 4,360.88 crore from Rs 3,973.62 crore.

Total provisioning increased to Rs 727.64 crore from Rs 420.45 crore. Net NPAs rose to 3.32 per cent from 2.04 per cent. In value terms, they grew to Rs 3,927 crore from Rs 2,131.07 crore.

The bank mobilised “unsecured redeemable non-convertible subordinated lower tier II bonds” worth Rs 1,000 crore, the company said in a filing to the BSE.

The scrips of both the banks took a hit on the bourses today. While the UBI declined 3.34 per cent to Rs 70.80, Uco Bank fell 5.11 per cent to Rs 67.80 on the Bombay Stock Exchange.